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Moderator Emerita
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haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007
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Re: Time for the Government to put an end to PICO

Glad you're back. We missed you! :smileyhappy:

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
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mickisue
Posts: 13
Registered: ‎05-26-2009
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Re: Time for the Government to put an end to PICO

I can certainly believe that those who pay cash, and don't ask for a cash discount on big ticket items, are absolutely paying more. As any business owner knows, even one with a small business like mine, taking credit or debit cards lowers your profit on anything you sell. Credit card merchant accounts cost you twice, every time you accept a card: there is a per-transaction cost, and a percentage of the total price cost.

 

Over and above that, if one has the discipline to ONLY use a credit card when it can be paid off in full each month, then the rewards, which can range from points that are redeemable for anything from a magazine subscription to a trip to Europe, to cash, can be a good way to use credit. If, however, you carry a balance, you are paying much more for those incentives than they can possibly be worth.

 

Most of you here know that. But for those who don't, here it is.

 

The issue that I have with dwelling on one's FICO score, and making monetary decisions on that basis, is that there are so few times in life that the FICO score, or your credit history, for that matter, come into play (or ought to). If you take reasonable care of your money, only use credit when it makes sense to do so, then your credit score will take care of itself.

New Member
Beney
Posts: 7
Registered: ‎07-27-2010
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Re: Time for the Government to put an end to FICO


MidnightVoice wrote:

DoneWithUnfairIsaac wrote:

 

The real secret to financial happiness is pay cash and stick that "cost of credit" in your pocket and not some CEO's or shareholders Swiss bank account.

 


Fabulous idea.  More people should do it.

 

http://ficoforums.myfico.com/t5/Credit-in-the-News/Who-Gains-and-Who-Loses-from-Credit-Card-Payments...

 

"On average, each cash-using household pays $151 to card-using households and each card-using household receives $1,482 from cash users every year."

 

 


On which statistics is that statement based?

Established Contributor
Revike
Posts: 720
Registered: ‎05-04-2007
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Re: Time for the Government to put an end to FICO

[ Edited ]

 


DoneWithUnfairIsaac wrote:

Just plain and simple this FICO thing is a flawed mess that needs some SERIOUS governmental regulation on what it can be used for and by Whom. Its a system ...


 

Do you read any of the replies or do you just post the same vague rant over and over? Fico is not a "thing". Fico is not a "system". Fico is a company that has done research on borrower risk for decades, and has created a number of formulas (scoring models) for rating risk. They have not put a gun to any lender's head and forced them to utilize any of their scoring models. There were lenders and borrowers before Fico existed. There were lenders and borrowers during Fico's early years - a period when lending decisions were often based on who you knew, or what your gender was, or what color your skin was. Currently, a large number of lenders utilize scoring models by Fico (and others) because it allows them to process a larger number of applications in a shorter time. More lenders happen to use Fico models because Fico has a longer history of research, and presumably is more accurate than its competitors. That's all. It's a formula, not a Puppet Master.

 

You seem to have a problem with capitalism, as it has evolved over the past few decades. The level of production and the level of retail sales (and the linked level of employment) has been elevated to a plateau which depends on people consuming goods before they have earned the equivalent value in wages. This didn't happen overnight, it's been going on for several decades. And it wasn't caused by a formula.

 

The bottom line is, you're in the wrong forum. If you have an issue with the credit culture, you should be ranting in a banking forum, or an automotive sales forum, or a real estate forum, or an advertising forum. Tell the people in those sectors how they have manipulated consumers psychologically and made instant shopping gratification an addiction.

 

Fico scores could disappear tomorrow, and after a slight hiccup while lenders picked a successor or tweaked their own semi-proprietary scoring models, lending would continue on and the vast majority of people would not be aware that anything had happened. A formula didn't cause any of the problems you rant about, and the absence of a formula isn't going to solve them ...

New Member
ricatchnc
Posts: 4
Registered: ‎08-25-2009
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Re: Time for the Government to put an end to FICO

Man, I'm with you on that.  Put an end to the mystical priesthood of credit scores.  It's time for an agency, with power, to investigate, standardize and regulate to insure FICO scores are fair and actually reflect credit worthiness or risk.  Also, let's stop using FICO for correlated but unrelated stuff like the cost of insurance.

Established Member
DoneWithUnfairIsaac
Posts: 65
Registered: ‎06-22-2010
0

Re: Time for the Government to put an end to FICO

You have it right ricatchnc!........ Why play a game you can't win! The banks used this FIFRAUD garbage to trap those who could afford credit if the cost of it was reasonable. Into a snare of much higher interest rates and terms the Mafia would have been proud of!...All the time using this formula garbage to justify. Your not going to win unless your well off enough not to carry a balance..Which of course if you are than why bother with credit at all...Pay cash and retain that cost of credit for yourself. As soon as you have to carry a balance the trap is sprung...and they know a vast majority of us will have to at some point. Then of course its..Oh dear dear your score has declined because your available credit has shrunk.....well we need to take you from %14 to 22%...its your own fault you know...and all the time Mr. Banker is thinking; Thank you FICO!!!! Its why the banks love it! Good ol legal consumer fraud!

 

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haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007
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Re: Time for the Government to put an end to FICO

 


DoneWithUnfairIsaac wrote:

You have it right ricatchnc!........ Why play a game you can't win! The banks used this FIFRAUD garbage to trap those who could afford credit if the cost of it was reasonable. Into a snare of much higher interest rates and terms the Mafia would have been proud of!...All the time using this formula garbage to justify. Your not going to win unless your well off enough not to carry a balance..Which of course if you are than why bother with credit at all...Pay cash and retain that cost of credit for yourself. As soon as you have to carry a balance the trap is sprung...and they know a vast majority of us will have to at some point. Then of course its..Oh dear dear your score has declined because your available credit has shrunk.....well we need to take you from %14 to 22%...its your own fault you know...and all the time Mr. Banker is thinking; Thank you FICO!!!! Its why the banks love it! Good ol legal consumer fraud!

 


 

You know, I'm sorry, but you're flat wrong. If you pay with cash, you can't "retain that cost of credit for yourself." The merchant is not going to refund the credit cost portion of the transaction to you. The merchant may save, but you won't.

 

As for your trap springing, I usually PIF, but once in a blue moon, I carry a balance. My util goes up for a while, and my scores drop.

 

I have never, EVER, had retaliation from a lender for a score drop.

 

Back when I was credit-stupid and let a 30-day late post, I was turned down for a Kohl's card. (And rightly so.) But nothing happened from any other lender.

 

Sure, people have gotten adverse action from lenders. A big part of that is lenders using any excuse they can find to shake down consumers to get more interest. But they have to pay when they pull a FICO score, and most don't bother pulling an actual score, other than maybe for an initial application. (And not always then.)

 

What's really happening is that they're rate-jacking consumers for changes in their credit reports. Lenders can pull a soft report on their customers for a whole lot less that it costs them to buy our FICO's. So why should they spend extra for a score?

 

They may tell you that it's a change in your score, although often when people re-read their letters it doesn't mention "score" at all, but it's really done because they've seen that your credit usage is going up on your credit reports, and they figure they might as well shake the money tree a bit and see what falls out. Frankly, I don't see how they can look at themselves in the mirror in the morning, but at least slow down your breathing enough to see how it really works.

 

Most of us need credit to purchase a home, and many of us need it for auto and school loans. The handy thing about loans is that their APR's are set on a schedule. Even if they're variable, they're tied to some sort of price index, not individual credit. It's revolving credit that makes you vulnerable, and that's why you shouldn't use credit beyond an amount that you can pay back pretty quickly.

 

And don't tell me about rich people. I'm not rich, and there are plenty of people (including here on the forums) who are working two jobs and saving every penny and who are managing their credit just fine.

 

I have absolutely no problem with people who choose to live off the credit grid. It doesn't bother me a bit. But that doesn't mean that it's not possible to use credit in a manner that not only doesn't hurt, but can actually benefit the consumer. Because of credit, I can buy a $3/ gal gas for $2.85. I save a couple of bucks on every bag of groceries. It's not much, but it's money back to me at the end of the day.

 

Anyway, enjoy your trolling.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Valued Contributor
casinoannie97
Posts: 1,989
Registered: ‎08-17-2007
0

Re: Time for the Government to put an end to FICO

I used to pay cash.  Then I had to rent a car,

book airline tickets, etc., etc.

 

Then I got some credit cards.

 

 

Established Member
DoneWithUnfairIsaac
Posts: 65
Registered: ‎06-22-2010
0

Re: Time for the Government to put an end to FICO

"What's really happening is that they're rate-jacking consumers for changes in their credit reports. Lenders can pull a soft report on their customers for a whole lot less that it costs them to buy our FICO's"

 

Buy OUR FICO'S?!?!.....Oh wait...I thought none of you were employees!....Just all "friendly, Happy credit consumers".....ROFLMAO....Those pesky Freudian slips!.

 

Anyhow you can  book flights, get hotel rooms ect...without a credit card very easy. I do it all the time. As for renting a car, well quite frankly, your a fool if you rent a car in the US now with their terms and about any other country you can do it with cash.

 

OK so you can save 10 cents on gas or a stick of butter....big deal. What you sound like is a typical gambler. HEY I just WON a $1000 Jackpot all the time ignoring the fact that he had to spend $3000 pulling the handle on the slot machine to get it....Yes American consumer you can save by spending....BULL! There is NO WAY you can even hope to break even playing the credit game. Its a trap plain and simple and its goals are 2 things. 1. Make you spend MORE and beyond your income. Often on crap if you think about it, you don't even need. 2.Make it EASY for you to spend beyond your means. Saddling you with debt . Yes you may play the game and pay off your balances every month....for awhile, And then something will happen. An income fluctuation perhaps...then you will be so brainwashed at that point you will spend to maintain your lifestyle because with credit its easy to to.....Then you are in the trap, Up go the rates, up goes the fees...Mr Banker gets a nice big smile on his face! We snagged another one who thought he was smarter than us! This game is like Nuclear war...the only way to win IS NOT TO PLAY!.

Member
mickisue
Posts: 13
Registered: ‎05-26-2009
0

Re: Time for the Government to put an end to FICO

Please correct me if I'm wrong (original poster), but I read "buy our FICO's" as "buy our credit score from FICO".

 

As for renting a car in the US...what do you propose someone who is on a business trip do? DRIVE from, say, Kansas City to Seattle and back? In the one day that his/her employer gives in order to make the trip? How about this: my son is getting married in south TX in two weeks. I live in MN. The closest airport costs $250/ticket more than driving 3 1/3 hours each way...and the cost of the rental car is $100. So, should we a)drive the 24 hour, 1500 mile each way trip, b) spend an extra $500 for the two tickets and then take cabs to and from the wedding or c) rent a car, save $400 and also save 41 hours of driving?

 

You DO have some valid points, but they are lost in your need to play gotcha. Knock it off, OK? It does your argument no good.


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